The crypto market saw a deepening decline this week, with both Bitcoin and Ethereum approaching key support levels. Spot trading remained sluggish, derivatives positions contracted significantly, and the Zcash vulnerability impacted the privacy coin sector, further dampening market risk appetite.
Spot transactions fell to a low level
According to data from CryptoQuant cited by CoinDesk, monthly spot trading volume fell to $679 billion in April, the lowest since October 2023. This indicates insufficient new buying interest and a lack of support in the market during the decline.
As of Friday, Bitcoin was trading at approximately $62,500, down more than 14.5% from the beginning of the week. Ethereum fell by more than 17%, dropping 5.5% on Friday alone, with its price returning to near its lowest levels since April 2025.
A key level the market is watching is $1420. Ethereum found support at this level in April 2025, subsequently embarking on a months-long rally. A break below this level could see the price range further down to the area of the previous bear market.
Derivatives positions contracted significantly.
This week, the Bitcoin derivatives market shifted from a modest recovery to deleveraging. Open interest fell 15% to $17 billion, and funding rates on multiple platforms either turned negative or returned to flat.
At Deribit, annualized funding rates have fallen to -15%, a reversal from the previous positive rate environment. The three-month annualized basis has decreased to 2.7% from 2.9% last week, indicating that institutional risk appetite continues to weaken.
The options market has also shifted to a defensive stance. In the past 24 hours, the ratio of put to call volume has returned to 50:50, losing its previous bullish structure; the one-week 25-delta skew has risen from 13% a week ago to 27%, indicating a significant increase in demand for downside protection.
- In the past 24 hours, approximately $1.2 billion was cleared across the entire network.
- Long positions were liquidated in approximately 76% of cases.
- BTC, ETH, and ZEC have the largest liquidation volumes.
Zcash vulnerability drags down privacy coins
Altcoins also came under pressure. Zcash plunged more than 30% on Friday after a security researcher discovered a vulnerability in its shielded pool that could mint "unlimited tokens." As a result, Monero has fallen about 12% since the beginning of the week, and Dash has dropped about 9%.
BitMEX co-founder Arthur Hayes also stated on the X platform that his institution had sold all of its ZEC holdings, further exacerbating market pressure. Meanwhile, ADA fell by more than 10%, and project founder Charles Hoskinson's announcement of a "temporary break" also weighed on sentiment.
AI tokens, which were relatively resilient at the beginning of the week, subsequently fell back, with FET, NEAR, and TAO all dropping by about 4% to 6%. However, the report mentioned that according to the average relative strength index (RSI) for the entire market, many crypto assets have entered oversold territory, and there may be room for a technical rebound in the short term.
